Toronto Real Estate Market Watch 06/18
April showers bring May growth! In real estate, May is regarded as the peak of the spring market, which in the Toronto region, saw major price jumps. Coming down from the spring peak, the rate at which prices are rising has dropped off, but price growth is still on the up and up.
Looking at sales stats, May saw 7,834 properties change hands – down 22% from last year’s record boom. As we’ve stated in the past, comparing the current market to the tidal wave of 2017 is like comparing apples & oranges – a more realistic view is the comparison between January to May, in which sales are up for the 5th straight month – and not by a little. Compared to January’s numbers we’ve nearly doubled the amount of sales (94% more sales in May 2018 compared to the end of January).
Prices also followed an upward trend – May hit an average price of $805,320, which is the highest price in 11 months, and a record for 2018. Throughout 2018, we have seen a constant increase of price growth within all sectors (Semis, Detached & Condos) – Semis are seeing a 13.9% price growth, followed by Detached and Condo prices with a gain of 11%. The detached market in Toronto East has reached an average price of $968,255 for May, and when compared to January 2018, the numbers are illuminating – it cost (on average) $80,830 more to buy in May than January, and when put back into a home would make a substantial renovation budget!
So, what does this mean for the coming months? Our data showcases the battle of two cities – the GTA remains polarized by its real estate market. The 905 has seen a decrease in price and increased days on market (DOM) compared to 2017, but the 416 market is doing amazing in contrast, and property is still selling. Buyers are eager to get into core Toronto, meaning offer dates and bidding wars are still frequent.
The market is steadily showing signs of revival; it’s picking up in terms of demand across categories, and overall buyer interest remains high despite major hurdles like the mortgage stress test, and the skyrocketing property prices over the last few years.
The big problem for Toronto remains the same, no matter the sales or prices. The supply of new listings in May was down by 26.2%, creating a problem of finding an ideal home that would meet all the buyer’s needs. TREB reports there are approximately 5 million extra bedrooms across Toronto going unused, yet potential sellers cannot sell, since there are no alternatives elsewhere. If the current trend continues, home prices are expected to rise slightly in 2019.
Currently, condominiums remain the strongest segment of the real estate market. The average price for a Toronto condo is $562,892, a 5.7% increase from last year! When you compare the current average to the average of 2016 it is even more drastic – in 2016 the average price was only $413,925. There is also no sign of the craze stopping; with 1,745 re-sale condo apartments sold only within the city this month, and many more sold as new developments, and pre-construction.
Our prediction for June? With the Ontario Fair Housing Plan introduced in late 2017, we saw the ripple it created with a slow start to the first quarter in 2018, but the market is back on track and revitalizing itself, and the numbers are once again climbing. With a continuing price growth, we are predicting positive numbers in BOTH overall sales and average prices (year over year) for June, with the summer market extending to the end of July. We’re excited to see where the market goes!
To talk more about how this market affects you, contact us today!
2018 Report – http://communications3.torontomls.net/statistics/mwatch/2018/05/mw1805.pdf
2017 Report – http://communications3.torontomls.net/statistics/mwatch/2017/05/mw1705.pdf